Written answers

Thursday, 17 February 2022

Department of Employment Affairs and Social Protection

Public Sector Pensions

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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231. To ask the Minister for Employment Affairs and Social Protection if local authority workers who were employed pre-1996 and who are paying a D stamp PRSI contributions are being forced to retire with A stamp benefits; if so, the basis for such a change; and if she will make a statement on the matter. [8928/22]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The insurability of public service employees, including local or other public authority workers, is provided for in the Social Welfare Consolidation Act 2005 (the 2005 Act) and Statutory Instrument No. 312 of 1996, Social Welfare (Consolidated Contributions and Insurability) Regulations 1996 (the 1996 regulations).

Public servants recruited on or after 6 April 1995 are liable for Class A PRSI.  Public servants recruited before 6 April 1995 may, in certain circumstances, be liable for a modified contribution rate of PRSI – Class D.  Class D involves a lower rate of contribution and a lower level of social welfare benefits.  These and other PRSI rates are known as modified rates and are provided for in Chapter 1 of Part IV of the 1996 regulations.

In certain circumstances, public servants who were, on 5 April 1995, in employment which was insurable at the modified rates may continue on the modified rate when they change employment.

The rules governing modified contributions for local or other public authority employees are contained in article 83(1) of the 1996 regulations.  In relation to local authority employees, there are three key paragraphs that are relevant.

Article 83(1)(a)provides that the modified rate of PRSI (class D) applies to persons who, on 5 April 1995, were employed, and continue to be so employed, under any local or other public authority in a capacity which:

- was permanent

- was pensionable 

- provided for payments during illness on a basis considered adequate by the Minister.

The regulations do not define what is ‘adequate’ in this context and there is no statutory mechanism or framework for the Minister to consider or measure whether a worker’s illness payments are adequate or not. 

The Social Welfare Appeals Office has found that, historically, the modified rate of PRSI was applied to non-manual/officer roles in public bodies and, normally, their illness payment scheme allows for a higher level of illness payments than the level provided for manual/non-officer grades.  The Chief Appeals Officer decided in 2018 that the higher level illness payment scheme sets the bar for what should be considered adequate under the provisions of the 1996 regulations.  Accordingly, this is the basis on which the Department now determines the insurability of public service workers.  This means that anyone not covered by the higher level of illness payments, on 5 April 1995, in a public body would not be covered by the modified rate under article 83(1)(a).

Article 83(1)(b)covers persons who, on 5 April 1995, were employed:

- under a local or other public authority to which the Local Government (Superannuation Revision) (Consolidation) Scheme 1986 (S.I. 391 of 1986) applies

- in a capacity which was not permanent and pensionable Class D can apply to such persons if they subsequently cease to be so employed and immediately become employed (that is, without any break in service):

- under any such local or other public authority

- in a permanent and pensionable capacity

- and are covered by illness payments considered adequate by the Minister,

It is important to note that, if the employment was permanent and pensionable on 5 April 1995, the provisions of article 83(1)(b) do not apply to them.

Article 83(1)(c)covers persons who, on 5 April 1995, were employed:

- under a public authority to which the Local Government (Superannuation Revision) (Consolidation) Scheme 1986 (S.I. 391 of 1986) does notapply

- in a capacity which was not permanent and pensionable

Class D can apply to such persons if they subsequently cease to be so employed and immediately become employed (that is, without any break in service):

- under that public authority

- in a permanent and pensionable capacity

- and are covered by illness payments considered adequate by the Minister,

Again, it is important to note that, if the employment was permanent and pensionable on 5 April 1995, the provisions of article 83(1)(c) do not apply to them.

Specific rules for continuation of modified rate

A limited category of public service employees who are on the modified rate may retain their modified status after they change employment.

Under the 1996 regulations, persons to whom the modified rates applied on 5 April 1995, may continue on the modified rate when they change employment, without a break in service, to another employment that also qualifies for the modified rates, that is, an employment:

(a) - in the civil service in a pensionable post,

(b) - as a member of an Garda Síochána

(c) - in a commissioned rank of the Permanent Defence Force

(d) - as a member of the Army Nursing Service

(e) - in a local or other public authority, which:

- is permanent

- is pensionable

- provides for payments during illness on a basis considered adequate by the Minister

(f) - in other specified public service employments with specified conditions (eg statutory transport authorities, teachers, work in voluntary hospitals etc).

Only people who were on the modified rate on 5 April 1995 may retain this status when they change employment to one of the employments listed above.  A person who became a modified contributor after 5 April 1995 (under article 83(1)(b) or article 83(1)(c)) cannot retain the modified status after the specified employment ceases.

Any queries in relation to the correct class of PRSI applicable should be directed to Scope Section of the Department of Social Protection by e-mail to Scope@welfare.ie or phone +353 (0)1 6732585.

I trust this clarifies the position for the Deputy. 

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